Tars
11-28-2009, 11:54 AM
There's an editorial in the NY Times (11/28) bemoaning the fact that new house starts "fell sharply in October". The NYT also asserts that, "All roads into and out of the recession run through the housing market." That makes sense, houses are large-ticket items, and our economy is consumer-driven.
I, pleased that the editors at the NYT appear to see a larger concept. In the longterm, it may be a better indicator for future prosperity if housing starts remain down. Aside from being a leading economic indicator, new housing starts indicate how our economy has been linked in a death grip with the expansion of suburbs.
The economic paradigm has changed, not slowly, but overnight. It's in our economic best interest NOT to build more houses, but to retrofit existing residential buildings so that they work more efficiently. The average American will really see a true economic resurgence when all those people whose incomes were tied to new construction, have learned the skills to make existing homes use less energy, use less water, and in many cases, export energy to the grid.
A young couple starting a family today should realistically have a different expectation about what type of home they'll live in. 3000 sq.ft. ranch home are the Hummers of the housing market. They're unnecessarily ostentatious, economically-draining, and obnoxiously wasteful in general.
New living construction should be limited to being done "in-town". Rather than just tearing them down and buiding anew, the most efficient and least unpleasant option for the next few decades should be to make those wasteful McMansions into multiple-family dwellings. The acres of lawn and ornamental landscaping around them needs to be revamped so it provides food and energy, or at the very least reduces resource usage.
NYTimes Editorial: Housing Weighs on the Economy (https://www.nytimes.com/2009/11/28/opinion/28sat2.html?_r=1&ref=opinion)
Excerpts:
"All roads into and out of the recession run through the housing market. During the summer, that road seemed to be heading toward recovery. These days, it seems to be headed back toward hard times. A reversal would have big implications for the economy and, by extension, the policies now being pursued by the administration, Congress and the Federal Reserve. The Commerce Department reported this month that new-home construction fell sharply in October. That led many economists to reduce their estimates for economic growth in the current quarter."
"A weakening housing market in a fragile economy is a recipe for pain. Already, nearly a third of homeowners with a mortgage — 15.7 million people — owe more on their mortgages than their homes are worth, according to Moody’s Economy.com (https://economy.com/). Negative equity combined with high unemployment greatly increases the risk of delinquencies and foreclosures, which, not surprisingly, continue to hit new highs.
A question for policy makers is, if real estate is not going to lead the way out of recession, what will? A related issue is where best to aim government resources as the hard times endure. The extension of the home buyer’s tax credit, which failed in its first go-round to spark lasting improvements, was a giveaway to the real estate industry. Relief and recovery efforts that are focused on job creation more directly, rather than on favored industries, are needed."
I, pleased that the editors at the NYT appear to see a larger concept. In the longterm, it may be a better indicator for future prosperity if housing starts remain down. Aside from being a leading economic indicator, new housing starts indicate how our economy has been linked in a death grip with the expansion of suburbs.
The economic paradigm has changed, not slowly, but overnight. It's in our economic best interest NOT to build more houses, but to retrofit existing residential buildings so that they work more efficiently. The average American will really see a true economic resurgence when all those people whose incomes were tied to new construction, have learned the skills to make existing homes use less energy, use less water, and in many cases, export energy to the grid.
A young couple starting a family today should realistically have a different expectation about what type of home they'll live in. 3000 sq.ft. ranch home are the Hummers of the housing market. They're unnecessarily ostentatious, economically-draining, and obnoxiously wasteful in general.
New living construction should be limited to being done "in-town". Rather than just tearing them down and buiding anew, the most efficient and least unpleasant option for the next few decades should be to make those wasteful McMansions into multiple-family dwellings. The acres of lawn and ornamental landscaping around them needs to be revamped so it provides food and energy, or at the very least reduces resource usage.
NYTimes Editorial: Housing Weighs on the Economy (https://www.nytimes.com/2009/11/28/opinion/28sat2.html?_r=1&ref=opinion)
Excerpts:
"All roads into and out of the recession run through the housing market. During the summer, that road seemed to be heading toward recovery. These days, it seems to be headed back toward hard times. A reversal would have big implications for the economy and, by extension, the policies now being pursued by the administration, Congress and the Federal Reserve. The Commerce Department reported this month that new-home construction fell sharply in October. That led many economists to reduce their estimates for economic growth in the current quarter."
"A weakening housing market in a fragile economy is a recipe for pain. Already, nearly a third of homeowners with a mortgage — 15.7 million people — owe more on their mortgages than their homes are worth, according to Moody’s Economy.com (https://economy.com/). Negative equity combined with high unemployment greatly increases the risk of delinquencies and foreclosures, which, not surprisingly, continue to hit new highs.
A question for policy makers is, if real estate is not going to lead the way out of recession, what will? A related issue is where best to aim government resources as the hard times endure. The extension of the home buyer’s tax credit, which failed in its first go-round to spark lasting improvements, was a giveaway to the real estate industry. Relief and recovery efforts that are focused on job creation more directly, rather than on favored industries, are needed."